By Anora Mahmudova and Carla Mozee, MarketWatch
NEW YORK (MarketWatch) -- The U.S. stock market opened higher on
Friday, putting the main benchmarks on track to record a second
straight week of gains.
Stock prices were boosted by a relative calm on the geopolitical
scene over the past week, while soft economic reports eased fears
that the Federal Reserve would hike rates sooner rather than
later.
The S&P 500 (SPX) opened 7 points, or 0.4%, higher at
1,962.20 and was set to record a solid weekly gain.
The Dow Jones Industrial Average (DJI) added 46 points, or 0.3%,
to 16,759.30 and was higher over the week.
The Nasdaq Composite (RIXF) began the session 27 points, or
0.6%, higher at 4,479.87 and was on track to record a weekly
gain.
Natalie Trunow, chief investment officer of equities at Calvert
Investments, said the broader environment as well as healthy
earnings are supporting the market.
"Flare-ups in the geopolitical scene have impacted risk-aversion
to some degree, but fundamentals remain healthy -- the U.S. economy
is growing and corporations' profits are growing," Trunow said.
In economic news, U.S. producer prices inched up in July, a
second consecutive month of gains, led by services such as
transportation and warehousing, the government reported Friday.
That is one of several recent inflation gauges that show price
growth isn't running too hot for the Fed.
Separately, thanks to a sizable jump in auto production,
industrial production rose in July, marking the sixth month of
gains, the Federal Reserve said Friday.
A reading on consumer sentiment from the University of
Michigan/Thomson Reuters is due at 9:55 a.m. Eastern Time. The mood
is expected to have improved in August; economists polled by
MarketWatch expect a preliminary reading of 82.3, compared with
81.8 in July. Analysts look at sentiment surveys to get a feel for
the direction of consumer spending, the key driver of the U.S.
economy.
"Recent stock gains and the steady weekly decline in gasoline
prices at the pump likely buoyed August sentiment," wrote Crédit
Agricole's chief economist for North America Michael Carey.
At 10:45 a.m. Eastern, Narayana Kocherlakota, the Minneapolis
Fed president, will talk about the economy and the state of
community banking at the Independent Community Bankers of
Minnesota's annual meeting. Kocherlakota, one of the Fed's leading
doves, is a voting member of the Fed policy committee this
year.
Crédit Agricole's Carey noted that geopolitical tensions in
Ukraine and the Middle East have put a strain on market sentiment
in recent weeks.
In Ukraine on Friday, border guards and customs officers began
inspecting a convoy of trucks that Russia says contains
humanitarian aid for war-torn eastern Ukraine. Ukraine has said the
convoy could be used as a prelude to a Russian invasion.
Stocks in focus
Monster Beverage (MNST) shares leapt on Coca-Cola's (KO) move to
acquire a 17% ownership stake in the energy drink company, as part
of a long-term partnership deal. Coke will make a $2.15 billion
cash payment and transfer its global energy drink business to
Monster.
Achillion Pharmaceuticals (US-ACHN) rallied in heavy volume
following positive results from a clinical trial related to
sovaprevir, the company's experimental hepatitis C treatment.
SeaWorld Entertainment (SEAS) shares rallied 3.3% after the
company confirmed that it will upgrade its killer whale tanks,
succumbing to public pressure from animal activists.
Applied Materials Inc. (AMAT) gained, after the chip-making
equipment provider's quarterly sales and earnings report topped
Wall Street expectations. Read more about the day's notable movers
here.
In other markets, 10-year Treasury yields fell 1.5 basis points
to 2.38%. Oil futures (CLU4) edged higher and gold futures (GCZ4)
fell 1.5%. In Asia, the Hong Kong Hang Seng index finished at its
best level in more than three years. European stocks were
higher.
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